Key figures who OK’d underfunding deals have donated to Alvarez, Faulconer
By Craig Gustafson
The two men running for San Diego mayor each claimed in their first debate that his opponent is supported by the special interests responsible for the pension scandal that left the city dubbed "Enron-by-the-Sea."
Yet both candidates — City Council members David Alvarez and Kevin Faulconer — have accepted campaign contributions and endorsements from some of the key players involved in the scandal.
Alvarez, a Democrat, laid the blame on the developers and corporations that supported past Republican mayors who chose to underfund the pension system to pay for pet projects. Faulconer, a Republican, blamed past city leaders for not standing up to labor union supporters who sought and received excessive pension benefits the city couldn’t afford.
They each got half the story correct while also applying a healthy dose of selective amnesia when it came to the role their own financial backers played in one of the darkest chapters in San Diego’s political history.
The truth is the pension scandal was a unique collaboration between labor, business, Democrats and Republicans to mortgage the city’s future to meet short-term obligations.
Eighteen years ago city leaders led by then-Mayor Susan Golding, a Republican, hatched a plan to free up money in the budget — some of which was used to host the 1996 Republican National Convention — by underfunding the pension system. The union-dominated pension board signed off on the deal after new contracts to retroactively boost retirement benefits for city workers were approved.
The exact same scenario — albeit with different players — occurred again in 2002 ahead of Petco Park’s construction. Each time, Democratic and Republican elected officials made their business backers happy with a big project and their labor allies happy with bigger pensions.
Then reality slowly set in. The decision to put less money into the pension fund while at the same time promising ever-larger benefits created a billion-dollar deficit, which the city failed to disclose when it sold bonds to build Petco Park. That lack of disclosure led to the suspension of the city’s credit rating, state and federal investigations, a decade of financial woe and what is now a $2.2 billion pension deficit.
Years of negative headlines touting six-figure city pensions have helped fuel the narrative that labor is to blame for the debacle and Faulconer is trying to tap into that frustration with his comments. Meanwhile, Democrats such as former Mayor Bob Filner and Alvarez have done their best to craft a counter narrative that casts city employees and taxpayers as the victims of underfunding decisions made at the behest of the downtown business establishment and Republican mayors.
During Wednesday’s debate, Faulconer accused Alvarez of aligning himself with "the same unions that nearly drove the city to the edge of bankruptcy." Alvarez countered that Faulconer’s supporters are "the same ones that caused the pension underfunding actually, they all voted for that, they all supported that."
Both candidates have support from individuals who cast decisive votes in the 1996 and 2002 underfunding deals.
Faulconer has received nearly $4,400 in campaign contributions from key players involved in the scandal, including $1,800 from former City Manager Jack McGrory, who was the architect of the 1996 underfunding deal. Other contributors include former council members Harry Mathis, Judy McCarty and Byron Wear — all Republicans — and former pension board members Frederick Pierce and Richard Vortmann. All voted to underfund the pension system.
Alvarez has received $1,500 in contributions from Rep. Scott Peters and former state Sen. Christine Kehoe and the endorsement of Assemblywoman Toni Atkins. Atkins and Peters voted for the 2002 underfunding while Kehoe approved the 1996 labor contracts. All three are high-profile Democrats.
In addition, Alvarez has been endorsed by the city firefighter union. Its former leader Ron Saathoff was considered the most influential pension board member in getting approval for the underfunding deals. Faulconer is backed by the Police Officers Association. Its pension board representative approved the 1996 deal but voted against the 2002 deal.
It wasn’t that long ago that taking money from someone involved in the pension scandal was considered taboo. In 2005, Jerry Sanders returned a $300 contribution from Pierce, the then-pension board president, during his successful mayoral run after reporters raised questions.
craig.gustafson@utsandiego.com
Source U~T San Diego
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